Macroeconomic Effects of Serbia’s Integration in the EU and the Euro Area

International Advances in Economic Research - In 2009, Serbia officially applied for European Union (EU) membership. In 2014, membership negotiations began. After joining the EU, Serbia will have...     

‘Geopolitics of Integration’ and the Imagination of South America

The main tenet of this article is to argue that the process of regionalisation in Latin America is entering into a new phase, where South America is consolidating an own process of regional integration. From being not more than a geographical expression, South America is rapidly becoming a political and economic entity with increasing international actorhood. One important difference to the past is that there is now a ‘core state’, Brazil, with a clear strategy directed towards deepening South American integration. Yet, Brazil is not alone; there is also an increasing convergence with other South American states and old rivalries are being substituted for increased cooperation in areas such as economy, infrastructure, energy, security or aid. As this article explains, the logic of action of the forces behind the process of integration can be understood by analysing the evolution of South American geopolitical current called ‘geopolitics of integration’.     

Risk premia and the foreign exchange market: The European Monetary System versus the ‘rest of the world’

This paper presents a new test of the hypothesis of uncovered interest rate parity. The possibility of investors' risk aversion is taken explicitly into account. The empirical work investigates proxies for various forms of risk over the period 1974(1)–1982(4) between the EMS and the ‘rest of the world’. Our results show that investors are sensitive to interest rate risk.     

Luigi Einaudi,the European Federation and the ECB’s Monetary Policy as Seen by Francesco Forte

Francesco Forte dedicated three books to the figure of Luigi Einaudi. The first was published in 1982, the second in 2009, and the third in 2016. Through these books he provides a comprehensive analysis of the liberal thought of Einaudi. This article focuses on Forte’s exploration and comments regarding Einaudi’s views and proposals for the European Federation (Einaudi 2011) and the European Central Bank’s unconventional monetary policy. Forte’s analysis of Einaudi has the merit of exalting one of the most prominent and lesser known features of his thought. Einaudi appears as the architect of what we call today the European Union. However no historian, economist, or politician has ever recognized the fundamental role of Einaudi. This lack of recognition should be extended to the Eurotower banker whose unconventional monetary policy has drawn so much from Einaudi’s theory of financial stability.     

Quantitative Easing Forever? Financialisation and the Institutional Legitimacy of the Federal Reserve’s Unconventional Monetary Policy

Scholars of financialisation have argued that the emergence of finance-led grow regimes requires new instruments for effective conduct of economic policy. In this scholarship, central banks have been seen as the most promising actors to utilise one of the most synergetic policies, the maintenance of high and stable prices of financial assets. Since the financial crisis of 2007–8, central banks of the developed world have adopted various unconventional monetary policy measures that serve this function. But will these unconventional measures become institutionally legitimate and institutionalised as conventional practice, as suggested necessary by scholars of financialisation? In this paper, we answer to this question by studying the institutional legitimation of the Federal Reserve’s Quantiative Easing (QE) programmes. We argue that the QE programmes have been legitimated successfully but with institutional legitimation strategies, which cause institutional pressures that question the potential of QE from becoming a regular policy instrument and practice.     

Analysis on Inefficiency of Transmitting the Monetary Policy of the Capital Market

Looking from the institutional system that the stock market services the state-owned enterprises, the bad corporate governing structure of the state-owned listed companies, the lack of balance between the yield from an investment and the stock, and the polarization of the wealth distribution in the stock market, we make an intensive analysis and exploration on the inefficiency of transmitting monetary policy of Chinese capital market herein.     

Integration,Diversity, Plurality: Territorial Governance and the Reconstruction of Legitimacy in a European ‘Postnational’ State

This article deals with the European ‘legitimacy crisis’ from a neglected perspective, looking at ‘Europe’ not primarily as a set of formal (or formalisable) institutions, but rather as an emergent, policy-driven institutional construct. In this perspective, European integration may be very much seen as the outcome of the policies that are enacted in the European supra-national arena as well as of the way such policies are continuously reinterpreted, renegotiated and re-enacted in the different arenas of its multi-level polity. What is at stake in adopting a policy approach to the European legitimacy issue is, hence, a critical appraisal of development of processes of ‘institutionalisation of Europe’ that range far beyond issues of constitutional design. A crucial consequence is the need to ‘spatialise’ discourse on European reforms. The conclusion is a plea for an integration model for Europe not only constitutionally respectful of diversity, but constitutively enhancing diversity, and for an approach to policy reforms acting upon a ‘political geography of differences’.     

“Core” and “Periphery” in a Monetary Union: A Macroeconomic Policy Game

We develop a dynamic game model of a two-country monetary union to study strategic interactions between macroeconomic policy makers, namely the central bank and governments. In this union, the governments of participating countries pursue national goals when deciding on fiscal policies, whereas the common central bank’s monetary policy aims at union-wide objective variables. The union considered is asymmetric, consisting of a core, with lower initial public debt, and a periphery, with higher initial public debt. For a symmetric demand shock, we derive numerical solutions of the dynamic game between the governments and the central bank using the OPTGAME algorithm. We show that mildly active cooperative countercyclical policies dominate noncooperative solutions and a scenario of no policy intervention. Optimal policies call for a brief expansionary action to bolster the effects on output and a return to a small fiscal primary surplus as soon as the crisis is over until the targeted level of public debt is reached.     

What Monetary Policy after the Crisis?

The objective of this paper is to reflect on some of the implications that recent economic experience has for monetary and financial stability policies. We contend that the financial crisis and the upsurge in inflation 2007–08 have shown that the policy model based on the new consensus in macroeconomics, which largely held sway over the past decade or more, is broken. It is argued that inflation targeting cannot deliver low inflation. We argue that fine-tuning through interest rates should not be attempted, but rather a constant real interest rate target based on the output growth rate should be adopted. The key objective of monetary policy should be shifted to financial stability, the independence of central banks should be brought to an end, and their decision making should be coordinated with other macroeconomic policy initiatives.     

Inflation Targeting - the Holy Grail of Monetary Policy?

Inflation targeting is a statement about the objective of central bank policy and not about operating procedures. Its success depends not only on the actions of the central bank, but requires a broad consensus concerning the proper role of monetary policy in the economy. It also requires the backing of a sound fiscal policy. As countries differ both in economic structure and monetary transmission mechanism, the implementation of inflation targeting must be country specific. Instability over time in the transmission mechanism also implies that inflation targeting strategies must evolve to avoid the fate of previous monetary policy targeting practices.     

Monetary policy through the ‘credit-cost channel’: Italy and Germany pre- and post-EMU

We present an empirical analysis of the ‘Credit-Cost Channel’ (CCC) of monetary policy transmission. This channel combines bank credit supply and interest rates on loans as a cost to firms. The thrust of the CCC is that it makes both aggregate demand and aggregate supply dependent on monetary policy. As a consequence (1) credit market conditions (e.g. risk spreads) are important sources and indicators of macroeconomic shocks, (2) the real effects of monetary policy are larger and persistent. We have applied the Cointegrated Vector Autoregression (CVAR) econometric methodology to Italy and Germany in the ‘hard’ EMS period and in the European Monetary Union (EMU) period. The short-run and long-run effects of the CCC are detectable for both countries in both periods. Simulation of the estimated model also confirms that inflation-targeting by way of inter-bank rate control stabilizes inflation through structural shifts of the stochastic equilibrium paths of both inflation and the output.     

Monetary and Financial Integration in the EMU: Push or Pull?

This paper examines the channels through which monetary union increased financial integration, using panel data on bilateral international commercial bank claims from 1998–2006. I decompose the increase in claims into three channels: a "borrower effect," as a country's EMU membership may leave its borrowers more creditworthy in the eyes of foreign lenders; a "creditor effect," as membership in a monetary union may increase the attractiveness of a nation's commercial banks as intermediaries, perhaps through increased scale economies or through an improved regulatory environment after the advent of monetary union; and a "pairwise effect," as joint membership in a monetary union increases the quality of intermediation between borrowers and creditors when both are in the union. Isolating these three channels through a series of difference-in-differences specifications, I find that the pairwise effect is the primary source of increased financial integration. This result is robust to a number of sensitivity exercises.     

Analyzing the Interaction of Monetary and Fiscal Policy: Does Fiscal Policy Play a Valuable Role in Stabilisation?

This paper provides an overview of recent papers which use estimatedNew Keynesian models to study the extent to which fiscal policycan be used to stabilize the economy. We use a variety of differentNew Keynesian models, estimated on data for both the US andfor the Euro area, and highlight the diverse transmission channelsthrough which fiscal policy acts in these models. Although wefind that fiscal policy can provide a useful complement to monetarypolicy, especially in models where consumers have finite horizons,there are important limitations to the value added of fiscalpolicy. (JEL E58, E62, E63)     

‘Conscience Capitalism’ and the Neoliberalisation of the Non-Profit Sector

This article analyses a range of initiatives, labelled as ‘conscience capitalist’, that have become prominent since the 2008 financial crash. Conscience capitalism encompasses projects emerging in both the for- and non-profit sectors that seek to connect neoliberal capitalism with concepts of morality and conscience. The article begins by unpacking conscience capitalism, showing how its for-profit advocates seek to transform capitalism by orienting it towards accounting for social and environmental externalities, and how its non-profit supporters seek to incorporate components of neoliberalism to serve their environmentally and/or socially focused agendas. Conscience capitalism appears to be a re-evaluation and call for reform of the prominent forms of neoliberalism. However, this article argues that, rather than comprising a hindrance, conscience capitalism offers a means of advancing the project. This is evident in its attempts to reconstitute social and environmental externalities in terms relatable to the market, and represent social and environmental problems in quantitative terms in which the success of market-based solutions can be read. Acknowledging some of the successes of conscience capitalist campaigns, the article concludes by arguing that this continued neoliberalisation of the non-profit sector favours campaigns consistent with neoliberalism and has the potential to undermine the democratic governance of non-profits.     

The Making of New ‘Space’: Cases of Transatlantic Astropolitics

This article investigates geopolitical interactions between Europe and the United States (US) in large-scale outer space application programmes, which I term transatlantic astropolitics. Europe and the US have transcended tangible geographical constraints on terrestrial territories and extended geopolitics to outer space with advanced technologies, thereby making outer space a new ‘space’ for transatlantic interaction. Transatlantic astropolitics reveals an instrumental rationality that both sides pursue interests with respective cost-effective calculation rather than shared norms, common culture, or collective identities. This phenomenon indicates an inconsistency between the discourse of transatlantic security community and practices of European and US individual geopolitical interest satisfaction. This article provides a coupling between theories of international relations (IR) and political geography in outer space issue area, and thereby identifies the role geopolitical thoughts play in transatlantic astropolitics. This article concludes with the validity of neo-classical astropolitics in explaining outer space activities, and cost-efficient calculation as the cause of strategic variation in transatlantic astropolitics.     

Corporate crime and the ‘Management’ of major hazards

This article is concerned with criminal activity in the context of the regulation of occupational safety and health; within this general concern is a more specific focus upon corporate crime, in the context of the management of major hazards. The article begins by, developing the argument that safety violations are indeed crimes, and ought to be treated as such. This leads on to a more general definitional discussion of the nature of corporate crime. The article then addresses the ‘production’ of

corporate crime in the context of the management of major hazards, This consideration begins by noting the principles of ‘effective’—and hy implication lawful—safety management, before going on to discuss briefly the findings of case studies on the management of safety in contexts characterized by the operation of hazardous technologies. It is concluded that the management and organization ofsafep in these contexts might be labelled ‘criminogenic’; a conclusion challenging arguments for increased self-regulation in the organization of safety in such contexts. More generally, it reinforces the claim that we need to consider hazardous technologies and their organizational and managerial contexts in terns of the possible production of safety crimes.     

The Euro Area,a Stressful Monetary Union? Learning from Newspapers’ Monetary Policy Coverage

Through a textual analysis of national newspaper articles covering European central bankers’ statements and policy decisions from 1999 to 2011, I derive the concerns expressed by national media in the Economic and Monetary Union (EMU). I consider these concerns as a benchmark for national preferences, and thus for the preferences of national central bankers in the EMU. I also test the existence of groups of national media (i.e., national publics) according to their shared expressed concerns. The results show that in the euro zone, similar concerns are shared by different country groups, corresponding to a group of countries from Northern Europe (Belgium, Finland, and the Netherlands), Southern Europe (Spain and Portugal), and the Periphery (Italy, Greece, and Ireland), but that there are two isolated countries (France and Germany), whose newspapers do not share the issues raised by the rest of the European newspapers. This approach provides further insights into the potential heterogeneity of the European central bankers inside the Governing Council of the ECB in terms of policy preferences.